By Teresa Rivas

Jefferies’ Peter Misek has a note out today on global PC sales, and it isn’t optimistic.

Misek maintained his below-consensus 2012 estimate of -4% year-over-year for branded PCs, with fourth quarter shipments down 5% year-over-year. He notes two main reasons: “1) Jefferies HK/China Technology analyst Ken Hui believes component pull-in by PC OEMs was 10% below forecast in October, with Lenovo and Asus relatively better. 2) Jefferies Japan Computer Hardware analyst Masahiro Wakasugi believes the HDD production forecast should be closely watched. HDD production forecast for CQ4 that was made in early Oct was 141-142M units but in mid-Nov was revised to ~136M since the initial reaction of Windows 8 PC by consumers was not as strong as expected. If sell-through during Black Friday is weaker than expected, HDD production forecast would be cut again in mid-Dec, which should be closely monitored.” Misek also notes that U.S. consumer holiday PC sales are down as much as 20% year-over-year.

He also reduced his estimates for 2013 and 2014, given macro headwinds and competition from smartphones and tablets. He now forecasts branded PCs to decline 3% next year, from a previous estimate of up 1%, with 2014 looking even gloomier, with a decline of 5%. He notes that in the next half decade he expects to see he PC replacement cycle lengthen two years, to about eight years, and overall annual PC shipment volumes falling from approximately 350 million to 300 million.

Not surprisingly, Misek’s outlook for tablets is much brighter, as he raised his estimates for both 2013 and 2014, from 170 million to 180 million (driven largely by the launch of Apple’s (AAPL) iPad Mini), and from 220 million to 225 million, respectively.

Misek writes that he is cautious on HP’s (HPQ) and Dell’s (DELL) PC businesses, as he seeks a ‘lackluster’ fourth-quarter pushing down average selling prices.

On a related note, Misek’s colleague Ross MacMillan also has a note out today maintaining his Hold rating on Microsoft (MSFT) but lowering his target price by $3 to $31, largely on a gloomy outlook for PCs.

He writes that Windows 8 is tracking to his expectations: “MSFT has sold 40M W8 licenses to date, in-line with W7 at a similar stage. However given the lower upgrade price ($40 v $50-100 for W7) and mix, which we think is skewed toward lower ASP units, we think overall ASPs will be lower. We still believe that current limited availability of W8 touch devices, X86 tablets and the myriad of cheap consumer alternatives means that MSFT has yet to find broad consumer adoption. But MSFT’s comments re customer feedback on W8 is better than many feared and we continue to monitor the situation closely.”

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NOVEMBER 29, 2012 11:40 A.M.

SCOOCH ELLIOTT wrote:

Peter Misek upgraded AAPL, but lowered the rest. Smart, that's because the APPLE iPad mini is selling like crazy, some 50 million this quarter alone,because no one wants the kindle fire. Also AAPL just got approval to sell their newest iphone in china....THAT IS HUGE!! AAPL headed to $850.00 a share

NOVEMBER 29, 2012 11:41 A.M.

Tom Galvin wrote:

For 'value' investors considering buying HPQ --and taking courage from its 2 day rally in the face of a credit downgrade-- I would urge caution: Keep in mind that 'shorts' need to book profits before tax increases too....

DECEMBER 6, 2012 11:07 A.M.

Happy with windows 8 wrote:

Be aware everyone, this article is extremely fake and I never recommend any one to read this kind of article on your website, Readers, don't get fooled by your traps.

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